According to a Guardian article published in May 2015, as the shock of the Conservatives election win stopped fears of a mansion tax on £2million plus homes, estate agents have been reporting calls from buyers at the top end of the property market.
The managing director of Sotheby’s International Realty UK stated “We are already taking calls from international buyers who want to get back into the market”.
Whilst the managing director from another firm in central London, Rokstone disclosed that calls began while votes were still being counted – “The first five serious inquiries on properties started to come in just after midnight, and as of 10am this morning I have had over 50 inquiries on London property, via calls and emails”. “Of the 50 or so inquiries we have had, around 50% are from UK buyers, with the balance from overseas purchasers, of these most are from the Middle East and Asia”.
It was also added that buyers who had already agreed sales were attempting to rush them through in case sellers increased prices – “We have already had this morning exchanges on over £26million worth of property, which I anticipate will rise to well over £30million by the close of the day”.
The article stated that uncertainty regarding tax incentives for homebuyers had caused a lull in activity since the start of the year, and the prospect of a mansion tax on homes costing £2million if Labour got into power, as mentioned previously, had slowed sales at the top end of the market.
Agents are said to have stated that the Conservative win brought certainty over economic policy, which would impact on all parts of the market.
Ed Mead, the director of a London estate agency Douglas & Gordon stated that over the next 12 months he expected “residential assets above £2million to increase by 20%”, and that over the next five years capital values in prime London could double.
“Crucially we think there is likely to be a 10-year cross party consensus – as there was between 1997-2008 – that seeks to encourage wealth creation, foreign inward investment, tight public spending and lower taxes.
“This will keep UK monetary policy loose and be a big green light for overseas investors to choose the UK in general, and UK real estate assets in particular , and to be able to do so with a 10-year horizon.”
Reaffirming this view even further, Lucian Cook who is the head of residential research at UK property firm Savills stated that “improvements in the London market are likely to be sufficient to trigger a renewed ripple effect into the markets beyond the capital, as those relocating from London find it easier to sell their existing home and take advantage of the price differentials with the rest of the country.”
He continued to say that “given where London prices sit relative to the rest of the country we would expect the biggest growth to be outside of the capital, with the strongest medium term prospects in the remainder of the south of the country given the expected pattern of economic growth.
Therefore, as the above experiences of individuals within the property industry have demonstrated, it is likely that the activity within the UK property market is about to pick up due to increased certainty regarding economic policy.
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